The Leasing Centre (Aust) -
A Chattel Mortgage facility can be beneficial to those small to medium sized businesses (less than A$1 million p.a. turnover) who choose to account for their business using the Cash Method.
Full Use, at a Known Cost
Like other equipment finance facilities, you have full use of the equipment during the term. You have the security of a predictable monthly payment, which can be lowered by adjusting either the deposit or the end of term ‘balloon’.
Unlike other facilities, however, you have ownership of the equipment from the outset. The Leasing Centre registers a charge over the equipment (similar to arranging a mortgage on a home).
Tax Effective Asset Management
One of the main benefits of a Chattel Mortgage is the ability for those who account for their business on a Cash basis to claim back the GST component on their next Business Activity Statement.
While the equipment does appear on your Balance Sheet, any interest paid plus depreciation of the equipment is tax deductible with business use. Because payments are calculated on the GST inclusive price, Chattel Mortgage payments attract no GST.
End of Term Options
At the end of the Chattel Mortgage term, the charge over the goods is cleared by simply paying the pre-determined balloon (similar to the residual value on a Lease).
Note though, that you do not usually have the option of handing the equipment back as you do with a Lease or Rental. It is possible, however, to repay the contract before the end of the term.
The Leasing Centre's expert staff will work with you to build a solution to allow you to secure the equipment you need to build, modernise or revitalise your business.
We tailor each equipment finance strategy specifically to the needs and capacities of each client - our solutions are designed to effectively help bridge the gap between needs and budgetary constraints.
